The German automaker said it would invest around 500 million euros (574 million dollars) in a new engine factory in Poland to expand its production facilities.
As Daimler keeps pushing its Mercedes-Benz unit to grab the selling-top spot of the global luxury segment, patient the production footprint expansion is a crucial step for further growth. The automaker initially considered Russia for a new plant, prescription but the economic uncertainties within the country made Daimler reconsider this plan. Therefore, the company shifted its focus towards Poland, where it announced a 500-million-euro investment to build the first Mercedes-Benz car factory there. Located in Jawor, about 70 kilometres west of Wroclaw, the new line will make four-cylinder gasoline and diesel engines for the three-pointed star brand’s passenger models. “Capacity expansion in Eastern Europe reflects the increasingly international orientation of our powertrain production compound. This will lead to more flexibility and efficiency in our worldwide production network,” Markus Schafe head of production planning, said.
The new engine plant in Poland is the company’s second one outside Germany. In this part of Europe, Daimler also has two sites in Romania where its subsidiary Star Transmission assembles transmissions and produces parts and components. Outside the region, the joint venture BBAC in Beijing, China, builds engines for local demands, while Infiniti makes four-cylinder gasoline units for Mercedes-Benz at its US plant in Decherd, Tennessee.